HMG Investment Holdings Ltd (Formerly known as the Hollins Murray Group) v National Westminster Bank Plc
| Jurisdiction | England & Wales |
| Judge | Lord Justice Flaux |
| Judgment Date | 24 May 2019 |
| Neutral Citation | [2019] EWCA Civ 1187 |
| Docket Number | Case No: A4/2019/0139(A) |
| Court | Court of Appeal (Civil Division) |
| Date | 24 May 2019 |
[2019] EWCA Civ 1187
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
The Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Flaux
Case No: A4/2019/0139(A)
Mr R Edwards, QC (instructed by Teacher Stern LLP) appeared on behalf of the Applicant
Mr A Ayres, QC and Ms M Cleary (instructed by Dentons UK & Middle East LLP) appeared on behalf of the Respondent
This is an application by HMG Investment Holdings (“the applicants”) for the court to reopen pursuant to CPR 52.30 the refusal on 28 February 2019 of permission to appeal the order of Robin Knowles J dated 17 December 2018 dismissing their claim.
The background is as follows. The applicants have alleged that the respondent bank had made what was called the decreased risk representation in relation to the proposed “Geared Collar”. During a telephone conversation on 4 April 2008, in response to concerns raised by Mr Mitchell of the appellants, who said, “my concern is, are we increasing our risk rather than decreasing it?”, Mr Bescoby of the bank said, “Well I think potentially you're actually decreasing it, and I'll tell you the reason why”. He went on to explain, as the judge found at paragraphs 34 to 35, 44 to 45, 56 and 66 of his judgment, that although the risk of breaching the floor was increased since the floor was now 4.15 per cent as opposed to 3.95 per cent under the existing hedging arrangements, the impact of breaching the floor was less, because the increase in rates under the Geared Collar if the floor were breached is more gradual than under the original hedging arrangements. The judge held that it was in that sense of the lesser impact of breaching the floor that Mr Bescoby said that potentially the Geared Collar was decreasing the risk. He rejected the applicant's argument that Mr Bescoby was referring to that the Geared Collar exposing the applicants to less risk overall than the original hedging instruments. The judge found at paragraph 70 that the decreased risk representation as alleged by the applicants had not been made, since what was said was not confined to the sentence relied upon by the applicants but included the explanation given and therefore whatever was represented was not false. Because the judge had concluded that the claim in misrepresentation failed, he concluded at paragraphs 59 to 63 of the judgment that the alternative case in negligence failed because he concluded that what he found was said by Mr Bescoby was not negligent. He also rejected the applicant's case based on its expert evidence that the representation was still false and said at paragraph 66 of the of his judgment as follows:
“I do not consider that this evidence means that what Mr Bescoby said was false. Properly understood Mr Bescoby was not saying ‘the new floor structure decreased the risk’. He was saying that the possibility of going through the floor was increased, but the impact was lessened.”
The judge held that he did not need to enter into questions of loss because they did not arise.
By an appellant's notice dated 17 January 2019, the appellant sought permission to appeal on the following grounds of appeal:
“ Ground 1
The judge's interpretation of Mr Bescoby's words to Mr Mitchell in the call on 4 April 2008 is contrary to their natural and ordinary meaning, and the reasons given in support of this interpretation are illogical, internally inconsistent or otherwise inadequate to explain or justify it. As a result, the judge's finding that the decreased risk representation is not made and all the conclusions which followed from that finding of fact, including the dismissal of HMG's claim of misrepresentation, the finding that the bank was not negligent and all the findings in relation to falsity, are wrong.
Ground 2
The judge was wrong to make the following two subsidiary findings of fact and wrong to take them into account insofar as he did so in dismissing the appellant's claim.
(1) The judge's finding at paragraph 47(b) that the appellant obviously appreciated that the absorption of break costs in the new structure would involve the bank receiving benefit elsewhere in the Geared Collar structure to reflect the internal costs is wrong. There was no evidence to support it. It was not put to any of the appellant's witnesses, and it was not open to the judge.
(2) The judge's finding at 53 that the appellant was aware of the increase in the credit line is wrong. It is not supported by the evidence relied on by the judge and is contradicted by the evidence of the appellant's witnesses, Mr Mitchell and Mr Thomas.”
This application was supported in the usual way by the appellant's skeleton argument from Mr Richard Edwards QC and Ms Lacey. Mr Ayres QC and Ms Cleary for the bank served a respondent's statement under CPR PD 52C, paragraph 19(1) setting out their reasons for submitting that the proposed appeal was hopeless. The application came before me on paper in the usual way. I considered all the documents to which I was referred, including for the avoidance of doubt the appellant's skeleton, and, on 28 February 2019, I refused permission to appeal, giving the following as my reasons:
“(1) I agree with the respondent that the judge's conclusion on the critical issue as to whether the so-called decreased risk representation was made is correct. In the context of the conversation between Mr Mitchell and Mr Bescoby as a whole, and from the surrounding circumstances, the judge was correct that what Mr Bescoby was saying when he said, ‘Well, I think potentially you're actually decreasing it, and I will tell you the reason why’ was not as the applicants allege that the Geared Collar would expose the applicant to less risk than the original hedging instruments. Rather, what Mr Bescoby was saying, as the judge found at paragraph 44, was that whilst under the Geared Collar the risk of breaching the floor was increased, the impact of breaching the floor was less than under the original hedging instruments. The judge correctly concluded that this statement of opinion was not false.
(2) So far as the second ground of appeal is concerned, I consider that the findings of fact made by the judge are not arguably incorrect, but even if they were, I agree with the respondent that it is not shown how they would have affected the outcome.
(3) Whilst it is unfortunate the judge chose not to deal with the other issues in the case, I do not consider that his failure to do so has affected the correctness of his conclusion on the critical issue. In the circumstances the proposed appeal has no real prospect of success.”
By an application dated 22 March 2019, the applicants seek to reopen that refusal of permission to appeal under CPR 52.30, alleging that I have failed to address any of the arguments advanced by the applicants in their grounds of appeal and...
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